UK cancels pioneering carbon capture and storage competition

The UK government has cancelled its £1 billion (about €1.4 billion) competition for carbon capture and storage (CCS) technology just six months before it was due to be awarded, breaking a key pledge in the Conservative party manifesto. EURACTIV’s partner The Guardian reports.

The abandonment of a technology seen as vital in tackling global warming will be an embarrassment to the UK just days before a major UN climate change summit in Paris. Industry figures called the move “devastating”.

Two projects had been in the running. One was backed by Shell and SSE at Peterhead. The other called White Rose was based at Drax, the UK’s largest power plant, and was in trouble after Drax said halted investment in September.

The government informed the London Stock Exchange at 3pm, stating: “Following the Chancellor’s autumn statement, HM government confirms that the £1bn ring-fenced capital budget for the Carbon Capture and Storage Competition is no longer available.

“This decision means that the CCS Competition cannot proceed on its current basis. We will engage closely with the bidders on the implications of this decision for them.”

The decision was not mentioned in Treasury documents.

“This is devastating,” said Luke Warren, chief executive of the CCS Association. “Moving the goalposts just at the time when a four-year competition is about to conclude is an appalling way to do business. It is a real blow to confidence for companies investing in CCS.”

Warren said ministers must urgently come up with new plans: “This technology is critical for the UK’s economic, industrial and climate policies. Without concrete government support for CCS the UK will lose the opportunity for cost-effective decarbonisation”.

Shadow energy secretary Lisa Nandy called the move a betrayal to communities: “Year after year the prime minister has personally promised to support CCS so this is a huge betrayal for all of the communities who could have benefited so much from this cutting-edge technology.”

CCS traps the carbon dioxide from coal and gas power plants and buries it underground so it cannot contribute to global warming. The UN’s Intergovernmental Panel on Climate Change concluded CCS is hugely important to tackling climate change in the most cost-effective way. Without CCS, the costs of halting global warming would double, the IPCC said.

The UK government’s own advisors, the Committee on Climate Change, said in October: “CCS is very important for reducing emissions across the economy and could almost halve the cost of meeting the 2050 target in the [UK’s] Climate Change Act.”